(a)When a domestic financial institution is involved in a transaction for the payment, receipt, or transfer of United States coins or currency (or other monetary instruments the Secretary of the Treasury prescribes), in an amount, denomination, or amount and denomination, or under circumstances the Secretary prescribes by regulation, the institution and any other participant in the transaction the Secretary may prescribe shall file a report on the transaction at the time and in the way the Secretary prescribes. A participant acting for another person shall make the report as the agent or bailee of the person and identify the person for whom the transaction is being made.

(b)The Secretary may designate a domestic financial institution as an agent of the United States Government to receive a report under this section. However, the Secretary may designate a domestic financial institution that is not insured, chartered, examined, or registered as a domestic financial institution only if the institution consents. The Secretary may suspend or revoke a designation for a violation of this subchapter or a regulation under this subchapter (except a violation of section
5315 of this title or a regulation prescribed under section
5315), section 411 [1] of the National Housing Act (12 U.S.C. 1730d), or section 21 of the Federal Deposit Insurance Act (12 U.S.C. 1829b).

(c)

(1)A person (except a domestic financial institution designated under subsection (b) of this section) required to file a report under this section shall file the report—

(A)with the institution involved in the transaction if the institution was designated;

(B)in the way the Secretary prescribes when the institution was not designated; or

(C)with the Secretary.

(2)The Secretary shall prescribe—

(A)the filing procedure for a domestic financial institution designated under subsection (b) of this section; and

(B)the way the institution shall submit reports filed with it.

(d) Mandatory Exemptions From Reporting Requirements.—

(1) In general.— The Secretary of the Treasury shall exempt, pursuant to section
5318(a)(6), a depository institution from the reporting requirements of subsection (a) with respect to transactions between the depository institution and the following categories of entities:

(A)Another depository institution.

(B)A department or agency of the United States, any State, or any political subdivision of any State.

(C)Any entity established under the laws of the United States, any State, or any political subdivision of any State, or under an interstate compact between 2 or more States, which exercises governmental authority on behalf of the United States or any such State or political subdivision.

(D)Any business or category of business the reports on which have little or no value for law enforcement purposes.

(2) Notice of exemption.— The Secretary of the Treasury shall publish in the Federal Register at such times as the Secretary determines to be appropriate (but not less frequently than once each year) a list of all the entities whose transactions with a depository institution are exempt under this subsection from the reporting requirements of subsection (a).

(e) Discretionary Exemptions From Reporting Requirements.—

(1) In general.— The Secretary of the Treasury may exempt, pursuant to section
5318(a)(6), a depository institution from the reporting requirements of subsection (a) with respect to transactions between the depository institution and a qualified business customer of the institution on the basis of information submitted to the Secretary by the institution in accordance with procedures which the Secretary shall establish.

(2) Qualified business customer defined.— For purposes of this subsection, the term “qualified business customer” means a business which—

(A)maintains a transaction account (as defined in section 19(b)(1)(C) of the Federal Reserve Act) at the depository institution;

(B)frequently engages in transactions with the depository institution which are subject to the reporting requirements of subsection (a); and

(C)meets criteria which the Secretary determines are sufficient to ensure that the purposes of this subchapter are carried out without requiring a report with respect to such transactions.

(3) Criteria for exemption.— The Secretary of the Treasury shall establish, by regulation, the criteria for granting and maintaining an exemption under paragraph (1).

(4) Guidelines.—

(A) In general.— The Secretary of the Treasury shall establish guidelines for depository institutions to follow in selecting customers for an exemption under this subsection.

(B) Contents.— The guidelines may include a description of the types of businesses or an itemization of specific businesses for which no exemption will be granted under this subsection to any depository institution.

(A)review, at least once each year, the qualified business customers of such institution with respect to whom an exemption has been granted under this subsection; and

(B)upon the completion of such review, resubmit information about such customers, with such modifications as the institution determines to be appropriate, to the Secretary for the Secretary’s approval.

(6) 2-year phase-in provision.— During the 2-year period beginning on the date of enactment of the Money Laundering Suppression Act of 1994, this subsection shall be applied by the Secretary on the basis of such criteria as the Secretary determines to be appropriate to achieve an orderly implementation of the requirements of this subsection.

(f) Provisions Applicable to Mandatory and Discretionary Exemptions.—

(1) Limitation on liability of depository institutions.— No depository institution shall be subject to any penalty which may be imposed under this subchapter for the failure of the institution to file a report with respect to a transaction with a customer for whom an exemption has been granted under subsection (d) or (e) unless the institution—

(A)knowingly files false or incomplete information to the Secretary with respect to the transaction or the customer engaging in the transaction; or

(B)has reason to believe at the time the exemption is granted or the transaction is entered into that the customer or the transaction does not meet the criteria established for granting such exemption.

(2) Coordination with other provisions.— Any exemption granted by the Secretary of the Treasury under section
5318(a) in accordance with this section, and any transaction which is subject to such exemption, shall be subject to any other provision of law applicable to such exemption, including—

(A)the authority of the Secretary, under section
5318(a)(6), to revoke such exemption at any time; and

(B)any requirement to report, or any authority to require a report on, any possible violation of any law or regulation or any suspected criminal activity.

(g) Depository Institution Defined.— For purposes of this section, the term “depository institution”—

(1)has the meaning given to such term in section 19(b)(1)(A) of the Federal Reserve Act; and

(2)includes—

(A)any branch, agency, or commercial lending company (as such terms are defined in section 1(b) of the International Banking Act of 1978);

(B)any corporation chartered under section 25A of the Federal Reserve Act; and

(C)any corporation having an agreement or undertaking with the Board of Governors of the Federal Reserve System under section 25 of the Federal Reserve Act.

In subsection (a), the words “coins or” are added, and the words “prescribe” and “prescribes” are substituted for “specify” in 31:1081, and “require”, for consistency. The words “other parties thereto or” in 31:1082 are omitted as surplus. The words “to the Secretary” in 31:1081 are omitted as unnecessary and for clarity. The words “in such detail” are omitted as surplus. The words “A participant acting for another person shall make the report as the agent or bailee of the person and identify the person for whom the transaction is being made” are substituted for 31:1082(last sentence) for clarity and to eliminate unnecessary words.

In subsection (b), the words “in his discretion” and “individually or by class” are omitted as surplus. The word “Government” is added for consistency. The words “or a regulation under this subchapter”, are added because of the restatement. The words “(except a violation of section
5315 of this title or a regulation prescribed under section
5315)” are added because 31:1141–1143 was not enacted as a part of the Currency and Foreign Transactions Reporting Act that is restated in this subchapter.

In subsection (c)(1), clause (A) is substituted for “with respect to a domestic financial institution . . . with that institution” for clarity. Clause (C) is substituted for “any such person may, at his election and in lieu of filing the report in the manner hereinabove prescribed, file the report with the Secretary” to eliminate unnecessary words.

References in Text

Section 411 of the National Housing Act, referred to in subsec. (b), which was classified to section
1730d of Title
12, Banks and Banking, was repealed by Pub. L. 101–73, title IV, § 407,Aug. 9, 1989, 103 Stat. 363.

Section 19(b)(1)(A) and (C) of the Federal Reserve Act, referred to in subsecs. (e)(2)(A) and (g)(1), is classified to section
461(b)(1)(A) and (C) of Title
12.

The date of enactment of the Money Laundering Suppression Act of 1994, referred to in subsec. (e)(6), is the date of enactment of title IV of Pub. L. 103–325, which was approved Sept. 23, 1994.

Section 1(b) of the International Banking Act of 1978, referred to in subsec. (g)(2)(A), is classified to section
3101 of Title
12.

Sections 25 and 25A of the Federal Reserve Act, referred to in subsec. (g)(2)(B), (C), are classified to subchapters I (§§ 601 et seq.) and II (§§ 611 et seq.), respectively, of chapter
6 of Title
12.

“(1) The Congress established the currency transaction reporting requirements in 1970 because the Congress found then that such reports have a high degree of usefulness in criminal, tax, and regulatory investigations and proceedings and the usefulness of such reports has only increased in the years since the requirements were established.

“(2) In 1994, in response to reports and testimony that excess amounts of currency transaction reports were interfering with effective law enforcement, the Congress reformed the currency transaction report exemption requirements to provide—

“(A) mandatory exemptions for certain reports that had little usefulness for law enforcement, such as cash transfers between depository institutions and cash deposits from government agencies; and

“(B) discretionary authority for the Secretary of the Treasury to provide exemptions, subject to criteria and guidelines established by the Secretary, for financial institutions with regard to regular business customers that maintain accounts at an institution into which frequent cash deposits are made.

“(3) Today there is evidence that some financial institutions are not utilizing the exemption system, or are filing reports even if there is an exemption in effect, with the result that the volume of currency transaction reports is once again interfering with effective law enforcement.

“(b) Study and Report.—

“(1) Study required.—The Secretary shall conduct a study of—

“(A) the possible expansion of the statutory exemption system in effect under section
5313 of title
31, United States Code; and

“(B) methods for improving financial institution utilization of the statutory exemption provisions as a way of reducing the submission of currency transaction reports that have little or no value for law enforcement purposes, including improvements in the systems in effect at financial institutions for regular review of the exemption procedures used at the institution and the training of personnel in its effective use.

“(2) Report required.—The Secretary of the Treasury shall submit a report to the Congress before the end of the 1-year period beginning on the date of enactment of this Act [Oct. 26, 2001] containing the findings and conclusions of the Secretary with regard to the study required under subsection (a), and such recommendations for legislative or administrative action as the Secretary determines to be appropriate.”

“(1) In general.—In implementing the amendment made by subsection (a) [amending this section], the Secretary of the Treasury shall seek to reduce, within a reasonable period of time, the number of reports required to be filed in the aggregate by depository institutions pursuant to section
5313(a) of title
31, United States Code, by at least 30 percent of the number filed during the year preceding the date of enactment of this Act [Sept. 23, 1994].

“(2) Interim report.—The Secretary of the Treasury shall submit a report to the Congress not later than the end of the 180-day period beginning on the date of enactment of this Act on the progress made by the Secretary in implementing the amendment made by subsection (a).

“(3) Annual report.—The Secretary of the Treasury shall submit an annual report to the Congress after the end of each of the first 5 calendar years which begin after the date of enactment of this Act on the extent to which the Secretary has reduced the overall number of currency transaction reports filed with the Secretary pursuant to section
5313(a) of title
31, United States Code, consistent with the purposes of such section and effective law enforcement.

“(c) Streamlined Currency Transaction Reports.—The Secretary of the Treasury shall take such action as may be appropriate to—

“(1) redesign the format of reports required to be filed under section
5313(a) of title
31, United States Code, by any financial institution (as defined in section 5312(a)(2) of such title) to eliminate the need to report information which has little or no value for law enforcement purposes; and

“(2) reduce the time and effort required to prepare such report for filing by any such financial institution under such section.”